The extension of European Union sanctions to Russian gas and nuclear energy “would have tragic consequences for Hungary”, and the government is working to obtain exemption from any such decisions, Prime Minister Viktor Orbán told public broadcaster Kossuth Rádió on Friday.
Early in the war, the European Union hoped to conclude the war through sanctions or at least facilitate that goal, but they have “taken us not an inch closer” to the end of the conflict, Orbán said in the interview. “We are facing a hard winter,” with the situation in Ukraine becoming tougher, Orbán said. Meanwhile, although Russia had suffered losses, its energy revenues are spiking, and so the “sanctions policy has failed to achieve its purpose”, he said.
While Hungary has achieved an exemption from the restriction on crude which will come into force on Dec. 5, and so has access to the oil necessary to run the country, it cannot extricate itself from the effects of the sanctions on prices, Orbán said. Hungary has so far “always achieved its national goals” in the negotiations on sanctions, “and so we are hopeful going into the next round of debates on the 9th package”. At the same time, the government has to fight against “constant pressure” so as to “protect our interests”, he said.
Hungary is against the European Union financing the operation of the Ukrainian state from a loan taken out jointly by its members, and stands by aid through bilateral agreements between member states and the war-torn country, Orbán said. “We would not like to see the EU become a community of states amassing joint debts instead of a community of cooperating member states,” he said. Hungary is generally against all policies based on joint loans, Orbán said. “We would not like the EU to become a community … of jointly indebted states,” he said. Such a measure would “burden our children and even grandchildren and compel us to pay the share of states that might go bankrupt in the meantime,” he said.
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Due to the war, Ukraine is now unable to finance itself. Hungary accepts that the aid is necessary, but “we are not happy with it — without the war, we wouldn’t have this expense,” Orbán said. Orbán called the concept of the global minimum corporate tax a “job killing tax hike”, and said the government refused to approve its introduction in Hungary.
Tens of thousands of jobs would be lost in the country if the global minimum tax were to be introduced, he said. “We cannot afford it,” he said, adding that “the tax issue is not a global one, it falls under national jurisdiction”. Every country must decide for itself what tax system it applies, he said. The reason voters like democracy is precisely that they get to pick a government which promises a certain tax policy, he added. “If we were to give this up, we would give up the Hungarian people’s right to decide an important element of Hungary’s economic policy: tax policy,” he said. “As a result, we do not think the global minimum tax is a good idea either for jobs or for democracy and we therefore do not approve its introduction in Hungary,” he added.
Regarding Hungary’s access to EU funding, Orbán said “Brussels is unfair with Hungary” due to fundamental differences in opinion and political reasons, but an agreement must be sought regardless. The EU’s refusal to approve Hungary’s recovery plan for the past 18 months was “for obvious political reasons”. “They don’t like the Hungarian government” as a consequence of a differences of opinions on fundamental issues, he added. Brussels would have preferred a left-wing government to enter power after the general election and they “rolled the dollars to the left wing to help them win” instead of giving the money to the country, he said. After the elections were won by the right wing, the European Commission was forced to negotiate with Hungary, he added.
Orbán said patience was needed because “we must seek an agreement” despite the EC repeatedly setting new conditions. The government, however, will refuse to change its position on certain basic issues, such as migration, allowing sexual propaganda in schools and the introduction of sanctions, he said.
Meanwhile, the government is calculating with a 1.5 percent growth, which would be enough to maintain the utility price caps which leave 181,000 forints (EUR 440) with families on average every month, Orbán said. “If Hungary’s government, entrepreneurs and employees work well” in the coming years, Hungary could avoid going into recession, Orbán said.
Source: MTI
2 Comments
Mr. Orbán still drinking Kremlin Kool-Aid… Again. The sanctions obviously didn’t bite, immediately – however it’s now clearly starting to hurt. Sending off fighting age men to Ukraine and others (male and female) leaving the country to avoid the draft and/or generations of hardship is not going to help you staff offices and factories – and they won’t be paying taxes, either…
https://tradingeconomics.com/russia/gdp-growth
Russia raised it’s military spend to 4.5 percent of GDP. However, due to the mobilization, this is a de facto reduction per soldier (and in case anyone missed it – the poor sods are woefully undertrained and -equipped). The only way to fund this (and the more creative import routes to procure tech) is to sell more oil, gas and other commodities to those wishing / able to buy. Good to read we are stepping up to the plate and helping the Kremlin. Please also consider there’s no way of funding spending by way of debt – so starving Russia of revenue may be the only realistic way to go!
Regarding the EU being “unfair” – all the EU wants is that its Members adhere to its rules. We struggle to keep up with the Copenhagen criteria – and that is the issue (member of club – the club’s rules apply?). Again, to spell out:
1. stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities;
2. a functioning market economy and the ability to cope with competitive pressure and market forces within the EU;
3. the ability to take on the obligations of membership, including the capacity to effectively implement the rules, standards and policies that make up the body of EU law (the ‘ acquis ’), and
4. adherence to the aims of political, economic and monetary union.
Regarding the fallacy of not subscribing to the global minimum tax rate (GMT). GMT only applies to overseas profits of multinational firms with 750 million euros in sales, globally. Governments could still set whatever local corporate tax rate they want, but if companies pay lower rates in a particular country, their home governments could “top up” their taxes to the 15 percent minimum, eliminating the advantage of shifting profits. SO – if we do not tax, another country will!
Issue with the “people voted for this tax policy” is that most do not understand how taxation works. If someone would talk people through the little (factual) overview below, they would understand the game that’s being played, in Hungary (guess who is carrying most of the burden?).
https://www.oecd.org/tax/revenue-statistics-hungary.pdf
Once again the warped views of an autocrat. Who is he to lecture on finances when monies to Hungary disappear into the pockets of his friends or into building another useless stadium. The holding back of EU funds, his fault alone. If he wants to help us he should cut VAT.
No good playing the ‘wanting to do what the will of the Hungarian people elected him for’ card. Everyone’s eyes are opened to his ways. No matter how many times he says it, Hungary is not a democracy, maybe it’s to try and keep convincing himself!